Covid19 influences consumer behaviour, is it possible?

Covid19 influences consumer behavior, is it possible?

Ni Nyoman Rsi Respati, SE., MM

Faculty of Economics and Business, Udayana University

Email: rsi_respati@unud.ac.id

The world is still feeling the effects of the emergence of the Covid19 virus. Consumers show different behavior from normal circumstances. The transition to the digital economy by all walks of life is very rapid in the past five months. This articel reviews the impact of Covid19 on consumer behavior.

Keywords: Consumer Behavior, Covid19

Preliminary

The past crisis caused changes in consumer behavior and acceleration in digital. In 2003 when the SARS outbreak in China changed consumer behavior, people began to care about cleanliness and shifted to shopping to a more environmentally friendly place, the digital trend that emerged at that time was Alibaba. In 2008/2009 in the United States there was a global financial crisis, consumers reduced their spending, the digital trend at that time was the service marketplace, emerging airbnb, Uber, TAKL. In 2015 the impact of MERS in South Korea caused a number of retailers to decline, South Korean people switched to consuming home-made food, there was an increase in spending on household ingredients online, the digital trend at that time was Coupang. The 2020 Covid Pandemic19 was the worst blow after the second world war for the whole world, people began to redefine the meaning of 'investment'. At present there is movement to the on-line channel. Digital ecosystem shows E-Commerse, social media, instant messaging, live streaming, digital payments, new applications are all connected so fast and this phenomenon occurs almost all over the world not just in some countries.

Description

The case of Covid in Indonesia alone recorded about 13,000 people exposed to the virus, with an increase of 300 people per day, the public was called upon to work and study from home, in Jakarta imposed large-scale social restrictions (PSBB) with the aim of preventing the spread of the virus in the Capital. The government provided a stimulus of 2.5% of GDP, amounting to 70 billion rupiah for health funds.

In the first quarter of 2020 many business agreements related to market demand were driven by the Covid19 phenomenon, focused on the digital economy, for example digital transactions in the health sector such as halodoc, online education such as teacher's room / webex / google classroom, agriculture such as tanihub, logistics such as Cargo , online loans such as Investree, online services such as Grab / Gojek and various other marketplaces or online services.

In Bain and Facebook's survey entitled "Southeast Asia digital consumer trends that shape the next normal" shows that the six consumption themes that emerge can be observed in 'New Normal':

1. Basics start moving online, where an increase of 45% of consumers shop for basic needs online.

2. The discovery of new applications is faster, 84% of consumers try new applications such as social media, video and instant messaging are studied by all age groups.

3. The value of money is a major consideration, 57% of consumers prioritize value when making decisions and consumers also consider saving more.

4. Reliable brands are on the rise, 40% of consumers try different brands, 42% of consumers are leaning towards buying more established brands.

5. Health and well-being are the top priority, 70% of consumers will continue to live healthy and balance their lifestyle

6. Stay at home and try not to make contact, 70% of consumers choose to work from home and run home hobbies such as watching streaming video or cooking.

Changes in lifestyle on-line can be said to be dramatic. Based on Bain's research, in terms of purchasing basic ingredients, 42% of respondents switched to online purchases, Lazada sellers increased by 4x, E-Commerce platform users increased by 28%, Movie streaming jumped 2x fold for example Netflix, 27% of Bain respondents started using media long-distance presence for the first time, Age over 55 years started trying online shopping.

Closing

Some companies may close down or reduce their business scale at this time. Many experts argue that South East Asia will recover in the second quarter of 2021. To deal with the recovery of this pandemic, companies need to have a perspective to deal with the "New Normal" such as studying how consumer behavior after this pandemic ends, is it changing or returning to the way it used to be? What will be the competitive advantage and future business model? How do governments and the public sector reshape new rules? What is clear at this time is that most people in the world are learning new habits by using digital media that can actually save time and money. This affects their behavior as consumers for now. With everything that is very practical and connected can create a new era after the Covid pandemic19